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China coal output seen up 2.7 per cent in 2014: Coal group

Chinese coal production is expected to grow 2.7 percent this year to around 3.8 billion tonnes, with demand also still rising despite a government campaign to cut air pollution, the China National Coal Association (CNCA) said on Thursday.

The association forecasts that despite efforts to restrict the import and use of low-quality coal, imports would also remain at around 300 million tonnes this year, with the price gap between domestic domestic and overseas markets still attractive.

Pollution is a growing concern for China's leaders, and Beijing plans to reduce the share of coal in its energy mix to less than 65 per cent, down from 65.7 per cent last year.

But total energy demand continues to soar and analysts still expect absolute coal demand to grow 2-3 percent a year over the next five years.

"Looking at the state's continuous efforts to strengthen its handling of air pollution, coal demand in major consuming regions like Beijing-Hebei-Tianjin, the Yangtze River Delta and the Pearl River Delta will be restricted," CNCA said in a statement posted on its website.

"But the maturity and economic feasibility of replacement energy technologies awaits improvement, and national coal demand will maintain its low rate of growth," the association said.

CNCA also said supply capacity was likely to reach around 4 billion tonnes in 2014, up from 3.7 billion tonnes in 2013.

Source: Reuters